The game takes place in the modern-day city of San Paro where there is a constant battle between Enforcers and Criminals, and the player will need to decide to which faction they want to belong.

Gameplay typically consists of the two sides fighting one another in missions, where one side must complete a series of objectives with the other side attempting to stop them doing so. For example, several Criminal players may rob a convenience store within the game; the game will then seek out one or more Enforcer players of equivalent skills and other criteria and will issue an all-points bulletin for them to stop the robbery and apprehend or eliminate the Criminals. Players earn money for participating in these missions, which can then be used to upgrade weapons, vehicles, and their character appearances, all of which influence the game.[10]

The game is played in the third person perspective. Upgrades, equipment, weapons, vehicles and clothing can be purchased from various contacts around the city (or can be alternatively bought through terminals in the social district), while ammunition is bought from vending machine-like terminals. Both the contacts and the "vending machines" are scattered throughout the main three districts of the city. Two of the districts feature their own fully persistent portions of San Paro, with their own pedestrian AI and a dynamic day/night cycle, along with certain contacts and missions. The third district acts mainly as a social component, being much smaller, having no pedestrians, restricting weapon and vehicle access, and featuring garages, auction houses, music studios, and several other NPC terminal shops. While in the third district, players, even if they're from opposing factions, cannot harm each other and may only interact through chat. In the other two districts, players are allowed to attack each other (so long as they are from opposing factions) during certain mission scenarios and/or if a player has a bounty on his head. When outside of these missions players can still draw and use weapons, however bullets, grenades, etc. will not work on other players, even those from an enemy faction. This prevents deathmatching and griefing.

There are also two other districts under the category of "fight club." These feature pure PvP environments for more experienced players and clans.

Depending on faction, players will have either a Prestige or Notoriety level, going from 0 to 5. This level goes up as the player successfully performs actions that help their faction's cause, such as killing players of the opposing faction, completing missions successfully, or by engaging in activities unique to their faction. Such unique faction actions include mugging pedestrians for Criminals, or arresting Criminals for Enforcers. The level decreases as the player hinders their faction; for instance, team-killing, dying, and destroying city objects as Enforcers.

0, a player is free to do as they please, and will not have enemy players dispatched against them.
1, the player receives slightly greater rewards from missions, and enemy players will be dispatched against them if they witness them performing certain actions.
2, the rewards are increased even more, and enemy players may be dispatched against their missions.
3, enemy players may be sent against the player regardless of actions, and rewards are increased further.
4, the player will receive increased rewards, enemy players will still be dispatched against them.
5, the player has a bounty put on their head, which allows them to interact with any player on the server. They can be killed by any Criminal or Enforcer, but a bounty player can kill anyone on the server. All rewards are greatly increased for a person with a bounty for being able to achieve goals while under extreme pressure. When someone kills a player with a bounty, unless they are an Enforcer killing a fellow Enforcer, the killer receives a large money and standing reward for being able to kill such a high-threat player. A bounty can be removed by death, or by reducing Prestige/Notoriety enough to reduce the level to 4.